Managers and private banking firms are striving to expand their portfolio of investment products and offer alternative assets to investors, such as private equity, infrastructure and private debt, in a context of volatility in the Stock Exchanges and long-term investment. low interest rates. Beyond this more classic alternative investment, there are other more exotic options, such as art, crypto assets or single malt scotch, which can offer attractive returns that are not without risk.
The increase in demand for premium malt whiskey from Asian countries, and especially China, has led to the emergence of firms that facilitate investment in this distillate under the premise of obtaining returns above 10%. Added to this high demand is a very limited supply: only 2% of the whiskey distilled in Scotland is malt, that is, it has spent a minimum of three years in oak barrels.
This type of investment consists not so much in filling the investor’s cellar but in trusting that the barrels that are acquired, and that will normally be stored by the company itself, will revalue after the years and will be sold to another investor or, if necessary , to a distillery for bottling. All this with the premise of almost guaranteed returns, as defended by this type of company, which also highlights the liquidity of this system for investors who want to recover their investment at any time. Of course, it is a type of investment that is not supervised by any regulator, such as the CNMV or the FCA, the UK financial services regulator.
A good number of companies dedicated to this type of investment have emerged in the market, although experts warn of the need to know the risks. Among them is Braeburn Whiskey, which has been operating in the market for six years and which, after the outbreak of the pandemic, is based in Barcelona. The firm offers “a comprehensive service to investors” of whiskey by advising them on what type of barrels to acquire for their portfolio and taking care of both storage and licensing and the payment of taxes to the British Government if chosen. for bottling.
“We help in the selection of the barrels, we meet with the client and see their investment objective, the budget from which they start and the investment terms they manage,” explains Samantha de Noia, director of business development at Braeburn Whiskey. who adds that they build a portfolio with barrels of different price and profitability to diversify the investment.
De Noia points out that Braeburn Whiskey has a portfolio of around 2,500 clients around the world and manages some 7,000 barrels that add assets of around 12 million pounds.
The barrels have an initial cost of between 2,500 and 3,000 pounds and from Braeburn Whiskey they point out that investors in this type of asset have an average initial budget that ranges from between 5,000 and 10,000 pounds (5,800 and 11,700 euros) from Spanish investors to between £ 10,000 and £ 15,000 from UK investors. De Noia in turn rules out that this type of investment is short-term investors and sets a divestment horizon of a minimum of five years.
Part of the increase in value of malt whiskey is in its maturation in barrels. Among them, those from Jerez are among the most valued, given that, according to Braeburn Whiskey estimates, they can raise the value of the whiskey they contain by between 25% and 30%.
Interest in Scotch malt whiskey has led Scotland’s top ten distilleries to record growth of 15% on average so far this year.
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.